Mirage Entertainment, Inc v. FEG Entretenimientos S.A. et al
Filing
46
OPINION & ORDER re: 37 MOTION to Dismiss filed by Mirage Entertainment, Inc., Mariah Carey. For the foregoing reasons, Counterclaim Defendants' motion to dismiss the counterclaims is granted in part and denied in part. Th e defamation counterclaim is dismissed. The breach of contract counterclaims against Carey are dismissed. The Clerk of Court is directed to terminate the motion pending at ECF No. 37. SO ORDERED. (Signed by Judge William H. Pauley, III on 8/29/2018) (anc)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
MIRAGE ENTERTAINMENT, INC.,
Plaintiff,
-againstFEG ENTRETENIMIENTOS S.A., et al.,
Defendants.
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18cv581
OPINION & ORDER
WILLIAM H. PAULEY III, Senior United States District Judge:
Mirage Entertainment, Inc. (“Mirage”) and Mariah Carey (“Carey,” and with
Mirage, “Counterclaim Defendants”) move to dismiss counterclaims asserted by FEG
Entretenimientos S.A. (“FEG Argentina”) and FEG S.A. (“FEG Chile,” and with FEG
Argentina, “Counterclaimants”) in this breach of contract action. Counterclaimants assert that
Counterclaim Defendants breached three contracts between the parties by unilaterally cancelling
two South American concerts without affording Counterclaimants an opportunity to cure.
Counterclaimants also allege that a 2016 tweet (the “Tweet”) that Carey posted to her Twitter
account was defamatory. For the reasons that follow, Counterclaim Defendants’ motion to
dismiss is granted in part and denied in part.
BACKGROUND
The allegations in the Counterclaims are accepted as true on this motion.
Counterclaimants are South American concert promoters. (Countercls. for Breach of Contract &
Defamation, ECF No. 14 (“Counterclaims”) ¶¶ 4–5, 10.) Mirage operates as Carey’s “loan out
corporation.” 1 (Counterclaims ¶¶ 6, 11.) In essence, Mirage contracts with others for Carey’s
live performances. (Counterclaims ¶ 11.) Non-party United Talent Agency (“UTA”)
coordinates transactions between artists and concert promoters. (Counterclaims ¶ 11.)
In June 2016, FEG Argentina and Mirage contracted for Carey to perform in
Buenos Aires, Argentina on October 28, 2016 (the “Argentina Agreement”). (Counterclaims
¶¶ 15–17.) FEG Argentina agreed to pay Mirage a fee of $575,000 in installments.
(Counterclaims ¶¶ 17–18.) FEG Argentina executed the Argentina Agreement and delivered it
to UTA in late September 2016. (Counterclaims ¶ 18.) FEG Chile and Mirage also contracted
for Carey to perform in Santiago, Chile on October 30, 2016 (the “Chile Agreements,” and with
the Argentina Agreement, the “Agreements”). (Counterclaims ¶¶ 20–22.) In two separate
contracts, FEG Chile agreed to pay Carey a fee of $425,000 and a net payment of $175,000 for
airfare and travel. (Counterclaims ¶¶ 20, 22.) Like the Argentina Agreement, the Chile
Agreements set schedules for installment payments. (Counterclaims ¶¶ 23–24.) FEG Chile
executed the Chile Agreements and delivered them to UTA in late September 2016.
(Counterclaims ¶ 23.)
Under the Agreements, Carey had the right to cancel her performances if
Counterclaimants failed to make timely installment payments. (Counterclaims ¶ 25.) But each
contract provided a notice and cure provision: if Counterclaim Defendants believed that
Counterclaimants were in breach, they agreed to provide written notification of the reasons for
such breach and afford forty-eight hours to cure. (Counterclaims ¶ 26.)
1
“A loan-out corporation is a legal fiction employed for the financial benefit of successful artists and
entertainers. It is a duly organized corporation, typically wholly owned by an artist, the sole function of which is to
‘loan out’ the services of the artist-owner to producers and other potential employers.” Bozzio v. EMI Grp. Ltd.,
811 F.3d 1144, 1147 (9th Cir. 2016) (citation omitted).
2
Counterclaimants’ payments were due in full by either September 8, 2016 or
September 15, 2016. (See Decl. of Jordan W. Siev in Supp. of Counter-Defs.’ Mot. to Dismiss,
ECF No. 38 (“Siev Decl.”), Exs. 1, 3.) 2 Counterclaimants failed to make payments according to
the installment schedules. As of October 25, 2016, they had “wired a total of $703,100 to UTA
. . . nearly 75% of all funds due.” (Counterclaims ¶ 27.) In fact, Counterclaimants made late
and/or deficient payments throughout late 2016 and never received objection from Counterclaim
Defendants. (Counterclaims ¶¶ 30–32.) Counterclaimants allege that this was consistent with
their business custom—installment schedules were rarely followed but “artists were always paid
in full.” (Counterclaims ¶ 12.)
On October 25, 2018, three days before the Argentina concert, Counterclaimants
learned through media reports that Carey had cancelled the Argentina and Chile performances.
(Counterclaims ¶¶ 36–37.) That evening, Carey tweeted “Devastated my shows in Chile,
Argentina & Brazil 3 had to be cancelled. My fans deserve better than how some of these
promoters treated them.” (Counterclaims ¶ 41.) The Tweet linked to an E! News tweet, which
in turn linked to an E! News article titled “Mariah Carey Cancels Part of her Latin America Tour
Citing Promoter Negligence.” (Counterclaims ¶ 42.) In that article, E! News reported that Carey
had been forced to cancel the South American leg of her tour due to “promoter negligence.”
Mike Vulpo, Mariah Carey Cancels Part of Her Latin America Tour Citing Promoter
Negligence, E! News (Jan. 10, 2017), https://www.eonline.com/news/804645/mariah-careycancels-part-of-her-latin-america-tour-citing-promoter-negligence. On October 26, 2016,
2
The Argentina and Chile Agreements may be considered as documents incorporated by reference into the
Counterclaims. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002).
3
Carey’s concert in Brazil was not contracted with Counterclaimants and is not implicated by this action.
3
Carey’s production manager confirmed cancellation of the performances by email and UTA then
returned more than $600,000 to Counterclaimants. (Counterclaims ¶¶ 38–39.)
In January 2017, Mirage sued Counterclaimants in California state court, asserting
breach of contract. (See Decl. of Robert E. Allen in Supp. of Defs.’ Notice of Removal of
Action Under 28 U.S.C. § 1441(a), ECF No. 1-1, Ex. A (“Original Compl.”); Ex. D, at 6–7.) In
December 2017, Counterclaimants removed the action to the United States District Court for the
Central District of California. (Defs.’ Notice of Removal of Action Under 28 U.S.C. § 1441(a),
ECF No. 1, at 1–2.) In January 2018, Counterclaimants filed an unopposed motion to transfer to
this district. (Defs.’ Notice of Mot. and Unopposed Mot. to Transfer Venue, ECF No. 12, at
1–2.) While that motion was pending, Counterclaimants answered and asserted these
counterclaims. Although the original claims were brought solely by Mirage, Counterclaimants
added Carey as a counterclaim defendant. The Central District of California subsequently
granted Counterclaimants’ transfer motion. (See Order Granting Defs.’ Mot. to Transfer Venue
to the Southern District of New York, ECF No. 16.)
In their motion to dismiss, Counterclaim Defendants contend that emails sent by
UTA to Counterclaimants demonstrate that Counterclaimants were provided notice of breach and
an opportunity to cure, meaning that Counterclaim Defendants did not unilaterally breach the
Agreements. They also contend that Carey is an improper defendant for the breach of contract
counterclaims. Finally, Counterclaim Defendants contend that the defamation counterclaim
should be dismissed.
LEGAL STANDARD
“To avoid dismissal, a complaint must plead ‘enough facts to state a claim to
relief that is plausible on its face.’” Hardaway v. Hartford Public Works Dep’t, 879 F.3d 486,
4
489 (2d Cir. 2018) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim is
facially plausible ‘when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.’” Tannerite Sports,
LLC v. NBCUniv. News Grp., a Division of NBCUniv. Media, LLC, 864 F.3d 236, 247 (2d Cir.
2017) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). A court “accept[s] the complaint’s
factual allegations as true and draw[s] all reasonable inferences in the plaintiff’s favor.”
Carpenters Pension Tr. Fund of St. Louis v. Barclays PLC, 750 F.3d 227, 232 (2d Cir. 2014)
(citation omitted).
A “complaint is deemed to include any written instrument attached to it as an
exhibit or any statements or documents incorporated in it by reference.” Chambers v. Time
Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002) (citation and quotation marks omitted). “Even
where a document is not incorporated by reference, the court may nevertheless consider it where
the complaint ‘relies heavily upon its terms and effect,’ which renders the document ‘integral’ to
the complaint.” Chambers, 282 F.3d at 153 (citing Int’l Audiotext Network, Inc. v. Am. Tel. &
Tel. Co., 62 F.3d 69, 72 (2d Cir. 1995) (per curiam)).
DISCUSSION
I.
Breach of Contract
A. Emails Attached to Counterclaim Defendants’ Motion
In moving to dismiss the breach of contract counterclaims, Counterclaim
Defendants attach six email chains to their motion. (See Siev Decl. Exs. 4–9.) They contend
that these emails demonstrate that Counterclaimants were provided notice and an opportunity to
cure their deficient payments. Further, they assert that this Court may take judicial notice of
5
these emails as matters integral to the pleading even though they were not attached or
incorporated into the Counterclaims.
When a document is not attached to a pleading or incorporated by reference, a
court may nevertheless consider it when “integral to the [pleading],” I. Meyer Pincus & Assocs.,
P.C. v. Oppenheimer & Co., 936 F.2d 759, 762 (2d Cir. 1991), such that the pleading “relies
heavily upon its terms and effect,” Int’l Audiotext, 62 F.3d at 72. The Second Circuit has held
that this standard “has been misinterpreted on occasion” and has therefore clarified that “a
plaintiff’s reliance on the terms and effect of a document in drafting the complaint is a necessary
prerequisite to the court’s consideration of the document on a dismissal motion; mere notice or
possession is not enough.” Chambers, 282 F.3d at 153 (emphasis original). This reliance
standard is strictly enforced because “[c]onsideration of extraneous material in judging the
sufficiency of a complaint is at odds with the liberal pleading standard.” Chambers, 282 F.3d at
154; see also In re Lyondell Chem. Co., 491 B.R. 41, 50 n.48 (Bankr. S.D.N.Y. 2013)
(recognizing that in Chambers, the Second Circuit “cut back on [its] earlier, broader,
pronouncements” regarding this standard).
The Counterclaims do not explicitly reference the emails attached to
Counterclaim Defendants’ motion to dismiss. Counterclaimants pled that they “w[ere] in
constant communication with UTA [and] [t]here was no correspondence in accordance with the
Notice and Cure Provisions that would have alerted [Counterclaimants] that Carey was going to
cancel her performances absent immediate payment of any outstanding amounts due.”
(Counterclaims ¶ 31.) They also allege that “[a]t no time . . . did Mirage or Carey raise any
issues concerning cancellation of the Argentina or Chile Performances.” (Counterclaims ¶ 32.)
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Those allegations are insufficient to conclude that Counterclaimants “relied” on
these emails, that they were incorporated by reference, or that they were “integral” to drafting the
Counterclaims. “[T]he co[unterclaims] make[] no explicit or implicit reference to” these specific
emails, “nor does it quote” from them. DeLuca v. Accessit Grp., Inc., 695 F. Supp. 2d 54, 60
(S.D.N.Y. 2010) (declining to consider certain documents on a motion to dismiss that were not
described in complaint); see also Goldman v. Belden, 754 F.2d 1059, 1066 (2d Cir. 1985)
(“[L]imited quotation does not constitute incorporation by reference.”); Tammaro v. City of New
York, 2018 WL 1621535, at *4 (S.D.N.Y. Mar. 30, 2018) (“[T]he mere fact that [the plaintiff]
may have had notice or possession of [documents] or that he mentioned the [documents] in the
complaint is insufficient.”).
Further, to consider documents outside of the pleadings on a motion to dismiss,
“[i]t must . . . be clear that there exist no material disputed issues of fact regarding the relevance
of the document[s].” Faulkner v. Beer, 463 F.3d 130, 134 (2d Cir. 2006); see DiFolco v.
MSNBC Cable LLC, 622 F.3d 104, 112 (2d Cir. 2010) (reversing district court’s dismissal of
breach of contract claim where the parties raised factual issues regarding documents the court
considered). In their motion papers, the parties raise a number of issues regarding these emails,
such as whether UTA intended them to constitute notice of breach, whether UTA was entitled to
provide such notice, and whether Counterclaimants should have interpreted them as such. Those
issues underscore why consideration of the email chains is improper at this stage. “The purpose
of Rule 12(b)(6) is to test, in a streamlined fashion, the formal sufficiency of the plaintiff’s
statement of a claim for relief without resolving a contest regarding its substantive merits.”
Glob. Network Commc’ns, Inc. v. City of New York, 458 F.3d 150, 155 (2d Cir. 2006)
(emphasis original). “[W]hen a district court considers . . . extra-pleading materials and excludes
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others, it risks depriving the parties of a fair adjudication of the claims by examining an
incomplete record.” Chambers, 282 F.3d at 155.
At bottom, Counterclaims Defendants seek to “test the factual underpinnings of
the [Counterclaims],” but the appropriate vehicle for such a test is to “submit proper evidence
outside the pleadings and move for summary judgment under Rule 56.” See LaBounty v. Adler,
933 F.2d 121, 123 (2d Cir. 1991). Without the emails, Counterclaim Defendants’ argument to
dismiss the breach of contract counterclaims collapses.
B. Carey as a Party
Counterclaim Defendants also contend that Carey should be dismissed from the
breach of contract counterclaims because she was not a party to those Agreements, which were
between only Counterclaimants and Mirage. (See Siev Decl. Exs. 1–3.) “It is hornbook law that
a nonsignatory to a contract cannot be named as a defendant in a breach of contract action unless
it has thereafter assumed or been assigned the contract.” Mazzei v. Money Store, 308 F.R.D. 92,
109 (S.D.N.Y. 2015) (citation and quotation marks omitted). In response, Counterclaimants aver
that Carey may be held liable because she is Mirage’s “alter-ego,” meaning that this Court may
pierce the corporate veil.
“New York law permits a plaintiff to ‘pierce the corporate veil’ and sue a nonsignatory for breach of contract when the non-party is an alter ego of one or more signatories.”
Javier v. Beck, 2014 WL 3058456, at *9 (S.D.N.Y. July 3, 2014). “[A] court may pierce the
corporate veil where (i) the owner exercised complete domination over the corporation with
respect to the transaction at issue, and (ii) such domination was used to commit a fraud or wrong
that injured the party seeking to pierce the veil.” Boroditskiy v. European Specialties LLC, -- F.
Supp. 3d --, 2018 WL 2538509, at *5 (S.D.N.Y. 2018) (citation and quotation marks omitted).
8
“Whether the alleged alter-ego entity ‘exercised complete domination’ . . . is
highly case-specific and must be made in view of ‘the totality of the facts.’” LiquidX Inc. v.
Brooklawn Capital, LLC, 254 F. Supp. 3d 609, 617 (S.D.N.Y. 2017) (citation omitted). Whether
Carey exercised complete domination over Mirage is an issue of fact. But Counterclaimants fail
to satisfy the second prong to pierce the corporate veil—they do not allege that Carey’s
domination “abused the privilege of doing business in the corporate form.” Morris v. N.Y. State
Dep’t of Taxation & Fin., 623 N.E.2d 1157, 1161 (N.Y. 1993). “[D]omination, standing alone,
is not enough; some showing of a wrongful or unjust act toward [the] plaintiff is required.”
Morris, 623 N.E.2d at 1161. Critically, the wrongful or unjust act “must consist of more than
merely the . . . breach of contract that is the basis of the [party’s] lawsuit.” Tradewinds Airlines,
Inc. v. Soros, 2012 WL 983575, at *6 (S.D.N.Y. Mar. 22, 2012) (citing NetJets Aviation, Inc. v.
LHC Commc’ns, LLC, 537 F.3d 168, 183 (2d Cir. 2008).
Counterclaimants plead that Mirage “is the personal loan out corporation of
Carey,” Carey’s “corporate alter ego,” and that Carey serves as Mirage’s Chief Executive Officer
and sole shareholder. (See Counterclaims ¶¶ 6–9.) But nothing in those allegations suggest that
Carey operated Mirage for a fraudulent purpose or that there was an abuse of the corporate form.
Counterclaimants do not allege that there was a “lack of corporate formalities, comingling of
funds, [or] self-dealing.” In re MBM Entm’t, LLC, 531 B.R. 363, 420 (Bankr. S.D.N.Y. 2015).
Indeed, loan-out corporations seem to be common—Counterclaimants themselves plead that
“[s]uccessful musical artists typically create . . . loan out corporation[s] . . . whose function is to
furnish the personal services of the artist.” (Counterclaims ¶ 15 n.2 (quotation marks omitted).)
See also Otano v. Ocean, 2013 WL 2370724, at *2–3 (C.D. Cal. May 30, 2013) (dismissing
loan-out corporation where complaint failed to demonstrate its liability).
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A summary allegation that Mirage operates solely for Carey’s benefit is
insufficient. “It is well established . . . that a business can be incorporated for the very purpose
of enabling its proprietor to escape personal liability . . . even though the proprietor continues to
benefit from the business’s success.” Am. Federated Title Corp. v. GFI Mgmt. Servs., Inc., 126
F. Supp. 3d 388, 402 (S.D.N.Y. 2015) (citation omitted); see Nelson v. Adams USA, Inc., 529
U.S. 460, 471 (2000) (“One-person corporations are authorized by law and should not lightly be
labeled [a] sham.”); Kasper Glob. Collection & Brokers, Inc. v. Glob. Cabinets & Furniture
Mfrs. Inc., 952 F. Supp. 2d 542, 578 (S.D.N.Y. 2013) (“[T]he mere fact that an individual is the
sole member, shareholder, or a controlling person in an entity does not, by itself, justify piercing
the corporate veil.”)
Therefore, Counterclaimants allege only that Mirage breached the Agreements.
“[I]t is well-established that an ordinary breach of contract, without evidence of fraud or
corporate misconduct, is not sufficient to pierce the corporate veil.” Highland CDO Opportunity
Master Fund, L.P. v. Citibank, N.A., 270 F. Supp. 3d 716, 732 (S.D.N.Y. 2017); see also
Capmark Fin. Grp. Inc. v. Goldman Sachs Credit Partners L.P., 491 B.R. 335, 350 (S.D.N.Y.
2013) (dismissing veil piercing claim where plaintiff did “not adequately allege[] . . . that
[defendant] used its . . . corporate form[] as a ‘sham’ to perpetrate a ‘fraud or injustice’” (citation
omitted).) “Since [Counterclaimants] ha[ve] not made any showing that there has been an abuse
of corporate form or other fraudulent conduct, [they] cannot carry the ‘heavy burden’ required to
apply the veil piercing/alter ego theory.” Spano v. V&J Nat’l Enters., LLC, 264 F. Supp. 3d 440,
452 (W.D.N.Y. 2017) (citation omitted). Accordingly, Carey is dismissed from the breach of
contract counterclaims.
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II.
Defamation
A. Statute of Limitations
Counterclaimants bring a defamation claim based on the Tweet. They contend
that the Tweet was knowingly false and damaged Counterclaimants’ reputation. (Counterclaims
¶¶ 63–71.) Counterclaim Defendants first assert that this claim is time-barred. In New York, a
defamation claim must be brought within one year. N.Y. C.P.L.R. § 215(3). The limitations
period begins accruing when “the libelous material first was published, that is, displayed to a
third party.” Tucker v. Wyckoff Heights Med. Ctr., 52 F. Supp. 3d 583, 596–97 (S.D.N.Y. 2014)
(citation omitted). Carey posted the Tweet on October 25, 2016. (Counterclaims ¶ 41.)
Counterclaimants filed the counterclaims in January 2018, exceeding the one-year period.
However, under C.P.L.R. § 203, “[a] defense or counterclaim is not barred if it was not barred at
the time the claims asserted in the complaint were interposed.” N.Y. C.P.L.R. § 203(d). Mirage
filed this action in January 2017. (See Original Compl., at 7.) Because Carey published the
Tweet three months before Mirage filed suit, Counterclaimants’ defamation claim was not timebarred at the time that Mirage interposed its claims. 4
B. Mirage as a Party
Second, Counterclaim Defendants assert that Mirage is not a proper party to the
defamation claim because the Tweet is solely attributable to Carey. In response,
Counterclaimants once again assert that Mirage and Carey are alter-egos and that Carey posted
the Tweet within her authority as an officer of Mirage. “A corporation may be held liable for
4
Counterclaim Defendants assert that this counterclaim is nevertheless time-barred because it lacks a “close
nexus” to Mirage’s original claims. But Counterclaim Defendants misinterpret N.Y. C.P.L.R. § 203(d) and the cases
that they cite. The “close-nexus” requirement is required only when a counterclaim is still time-barred at the time
that the original claims were filed. See Siegel, N.Y. Prac. § 48 (6th ed. 2018). When a counterclaim was not timebarred at the time of the complaint, the plain language of § 203(d) applies.
11
defamatory utterances made by its officer or agent, acting within the scope of [her] authority.”
Unker v. Joseph Markovits, Inc., 643 F. Supp. 1043, 1049 (S.D.N.Y. 1986). Although “a
corporation can only speak through its officers, employees, and authorized agents,” Treppel v.
Biovail Corp., 2005 WL 2086339, at *3 (S.D.N.Y. Aug. 30, 2005), that does not mean that every
statement of an officer is a statement of the corporation, cf. Treppel, 2005 WL 2086339, at *3
(holding that not every statement of a corporation can be attributable to every officer within that
corporation).
Counterclaimants fail to plead that Carey posted the Tweet within the scope of her
authority as an officer of Mirage. Rather, they plead that “Carey released a public statement” in
which “Carey . . . insinuate[d] that [Counterclaimants] had somehow mistreated concertgoers in
South America.” (Counterclaims ¶ 41 (emphasis added).) The Tweet was posted to Carey’s
personal Twitter account and did not mention Mirage or the Agreements. (See Counterclaims
¶ 41.) Indeed, Counterclaimants refer to the Tweet as “Carey’s Tweet.” (See Counterclaims
¶¶ 42, 63 (emphasis added).) See Mosdos Chofetz Chaim, Inc. v. RBS Citizens, N.A., 14 F.
Supp. 3d 191, 215 (S.D.N.Y. 2014) (dismissing slander claim against corporation where plaintiff
alleged “no more than a conclusory allegation that the statements were made by ‘an agent of [the
corporation]’”); cf. Genesis Int’l Holdings v. Northrop Grumman Corp., 238 F. App’x 799, 802
(3d Cir. 2007) (finding that the pleading sufficiently pled vicarious liability for defamation based
on factual allegations demonstrating that the employee was speaking within the scope of his
employment).
Counterclaimants’ contention that Mirage and Carey are alter-egos is
unpersuasive because Counterclaimants fail to allege that Carey’s use of Mirage was in any way
improper. “[T]here is a presumption of separateness between a corporation and its owners,
12
which is entitled to substantial weight.” CBF Industria de Gusa S/A v. AMCI Holdings, Inc., -F. Supp. 3d --, 2018 WL 3014091, at *6 (S.D.N.Y. 2018); see Wm. Passalacqua Builders, Inc. v.
Resnick Developers S., Inc., 933 F.2d 131, 138 (2d Cir. 1991) (“The critical question is whether
the corporation is a ‘shell’ being used by the individual shareowners to advance their own purely
personal rather than corporate ends.” (citation and quotation marks omitted)).
This pleading deficiency precludes holding Mirage liable for the Tweet.
Accordingly, Mirage is dismissed from the defamation counterclaim. See Mackay v. Real Cars,
Inc., 626 N.Y.S.2d 548, 549 (N.Y. App. Div. 1995) (affirming dismissal of defamation claim
against company where “plaintiffs . . . failed to show that the author wrote the article on behalf
of [the company], or in his capacity as president of [the company]”).
C. Defamation Claim Against Carey
Turning to the merits of the defamation claim against Carey, Counterclaim
Defendants contend the Tweet is not actionable because it was Carey’s opinion. It is a question
of law whether the disputed statements in a defamation claim are “of fact, which may be
defamatory, [or] expressions of opinion, which are not.” Live Face on Web, LLC v. Five Boro
Mold Specialist Inc., 2016 WL 1717218, at *2 (S.D.N.Y. Apr. 28, 2016) (citation and quotation
marks omitted). “[I]f the statements are held to be expressions of opinion, they are entitled to the
absolute protection of the First Amendment . . . .” Steinhilber v. Alphonse, 501 N.E.2d 550, 552
(N.Y. 1986); see also Gross v. N.Y. Times Co., 623 N.E.2d 1163, 1167 (N.Y. 1993) (noting that
because “only ‘facts’ are capable of being proven false, it follows that only statements alleging
facts can properly be the subject of a defamation action” (citation and quotation marks omitted)).
In making this determination, “statements must . . . be viewed in their context in order for courts
to determine whether a reasonable person would view them as expressing or implying any facts.”
13
Immuno AG. v. J. Moor-Jankowski, 567 N.E.2d 1270, 1278, 1281 (N.Y. 1991) (emphasis
omitted) (holding that a court must consider a statement’s “tone and apparent purpose”).
New York courts employ a three-part test in determining whether a statement is of
fact or opinion:
(1) whether the specific language in issue has a precise meaning
which is readily understood; (2) whether the statements are capable
of being proven true or false; and (3) whether either the full context
of the communication in which the statement appears or the broader
social context and surrounding circumstances are such as to signal
readers or listeners that what is being read or heard is likely to be
opinion, not fact.
Gross, 623 N.E.2d at 1167 (citation, quotation marks, and alteration omitted). Here, the Tweet:
(1) linked to an E! News article regarding Carey’s South American concerts; and (2) stated
“Devastated my shows in Chile, Argentina & Brazil had to be cancelled. My fans deserve better
than how some of these promoters treated them.” (Counterclaims ¶ 41.) Viewed in context,
Carey tweeted an opinion. What Carey’s fans “deserve” and whether they “deserve better” than
how some promoters “treated them” is conjectural and vague. “[It] may mean different things to
different people, and [is] not capable of being proven true or false because of [its] subjective,
relative meaning[].” Live Face on Web, 2016 WL 1717218, at *2; see 43A N.Y. Jur. 2d
Defamation & Privacy § 17 (2018) (“A statement that is indefinite, ambiguous, and incapable of
being objectively characterized as true or false falls within the category of pure opinion.”);
Gross, 623 N.E.2d at 1167 (“The dispositive inquiry . . . is whether a reasonable reader could
have concluded that the [statements] were conveying facts about the plaintiff . . . .” (citation,
quotation marks, and alterations omitted)). A jury could not determine whether Carey’s fans
“deserve better” because there is no objective standard to which that statement can be compared.
See Buckley v. Littell, 539 F.2d 882, 893 (2d Cir. 1976) (rejecting defamation claim based on
14
the “tremendous imprecision of the meaning” of the challenged statements); Hollander v.
Cayton, 536 N.Y.S.2d 790, 792 (N.Y. App. Div. 1988) (statements that physician was
“‘immoral’, ‘unethical’, and had ‘mismanaged cases’” were not actionable as they were
“incapable of being objectively characterized as true or false”).
Counterclaimants contend that the Tweet is an actionable “mixed-opinion”
because it implied facts that Carey did not disclose. “Though some statements may be
characterized as hypothesis or conjecture, they may yet be actionable if they imply that the
speaker’s opinion is based on the speaker’s knowledge of facts that are not disclosed to the
reader. . . . On the other hand, if a statement of opinion either discloses the facts on which it is
based or does not imply the existence of undisclosed facts, the opinion is not actionable.” Levin
v. McPhee, 119 F.3d 189, 197 (2d Cir. 1997).
But here, Carey provided the basis for her opinion—the E! News article reporting
that Carey’s concerts had been cancelled. It would be clear to any reader that Carey’s opinion
that her fans “deserve better” was based on the contents of that article. See Brahms v. Carver, 33
F. Supp. 3d 192, 200 (E.D.N.Y. 2014) (dismissing defamation claim because the internet posting
at issue “was accompanied by the news article on which it was so obviously based”).
Accordingly, Carey did not imply that she “knows certain facts, unknown to the audience, which
support[ed] [her] opinion.” See Davis v. Boeheim, 22 N.E.3d 999, 1004 (N.Y. 2014) (citation
and alteration omitted). Rather, by linking to the E! News article, she provided the basis for her
opinion, and surmised that her fans “deserved better.” In any event, Carey’s concern of what her
fans deserve is not “verifiable as either true or false.” See Jessel Rothman, P.C. v. Sternberg,
615 N.Y.S.2d 748, 750 (N.Y. App. Div. 1994) (“[I]f a statement is not verifiable, then a plaintiff
cannot provide it false, and the statement cannot be actionable . . . .”).
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“New York Courts have consistently protected statements made in online forums
as statements of opinion rather than fact.” Bellavia Blatt & Crossett, P.C. v. Kel & Partners
LLC, 151 F. Supp. 3d 287, 295 (E.D.N.Y. 2015) (collecting cases demonstrating that online
posts and blogs tend to be of opinion). Viewed in context, Carey was not implying facts about
Counterclaimants, but expressing her wish that her fans had been able to attend her South
American concerts. Such an abstract desire is incapable of being termed defamatory.
To the extent that Counterclaimants allege that the E! News article is in itself a
defamatory statement attributable to Carey (an argument referred to in their briefing), such an
allegation is insufficiently pled. A fair reading of the Counterclaims make clear that this
counterclaim is based solely on the Tweet, not whatever statements Carey provided to E! News.
(See, e.g., Counterclaims ¶¶ 63, 65–66 (“Carey’s Tweet, was defamatory . . . The Tweet was
published and broadcast through the Twitter Network to over 16.8 million followers. . . . The
Tweet was false.”) No substantive allegations describe Carey’s statements to E! News, what
they were, when they were given, or how they damaged Counterclaimants. Instead, the
Counterclaims’ allegations all concern the Tweet. (See Counterclaims ¶ 68 (“The Tweet was a
substantial factor in causing [Counterclaimants] to suffer financial loss . . . .”).)
In fact, Counterclaimants’ sole reference to the E! News story is two assertions
stating that “Carey’s Tweet linked to an ‘Exclusive’ story published by E! News . . . . That story
further repeated and spread Carey’s false statements . . . .” (Counterclaims ¶ 42.) These
conclusory allegations are devoid of underlying facts. See Iqbal, 556 U.S. at 678 (pleadings
“demand[] more than an unadorned, the-defendant-unlawfully-harmed-me accusation” and will
not suffice “if [they] tender[] ‘naked assertion[s]’ devoid of ‘further factual enhancements’”
(citing Twombly, 550 U.S. at 555, 557)). Accordingly, Counterclaimants fail to make out a
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separate defamation claim based on the E! News article. See Rohn Padmore, Inc. v. LC Play
Inc., 679 F. Supp. 2d 454, 460 (S.D.N.Y. 2000) (holding that the failure to state “the time and
manner in which the publications were made” was fatal to plaintiff’s defamation claim).
Finally, Counterclaimants’ contention that the Tweet was defamatory by linking
to the E! News article is without merit. Although one who republishes defamatory content may
be liable, see Restatement (Second) of Torts § 578 (1977), “[a] hyperlink . . . does not duplicate
the content of a prior publication; rather, it identifies the location of an existing publication,”
Doctor’s Data, Inc. v. Barrett, 170 F. Supp. 3d 1087, 1137 (N.D. Ill. 2016); see In re Phila.
Newspapers, LLC, 690 F.3d 161, 175 (3d Cir. 2012) (“[T]hough a link and reference may bring
readers’ attention to the existence of an article, they do not republish the article.”). This can be
contrasted with Enigma Software Group USA v. Bleeping Computer LLC, in which the district
court determined that a republishing had been demonstrated through the defendant not only
linking to previously published material, but also restating that material. 194 F. Supp. 3d 263,
278 (S.D.N.Y. 2016). The fact that Carey linked her Tweet to the E! News article does not
constitute a republication of that article.
CONCLUSION
For the foregoing reasons, Counterclaim Defendants’ motion to dismiss the
counterclaims is granted in part and denied in part. The defamation counterclaim is dismissed.
The breach of contract counterclaims against Carey are dismissed. The Clerk of Court is
directed to terminate the motion pending at ECF No. 37.
Dated: August 29, 2018
New York, New York
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